Saturday, January 26, 2008

After a day's pause, the bulls were back in action on Friday riding a global rally after the Bush administration announced an economic stimulus plan aimed at stemming mortgage-market losses in the US. Realty shares were frontrunners, followed by the banking pack.

National Stock Exchange's Nifty closed 6.95 per cent or 350 points higher at 5383.35. It touched a high of 5399.25 and low of 5035.05 intraday.

Bombay Stock Exchange's Sensex ended at 18,361.66, higher by 6.62 per cent or 1,139.92 points from Thursday's close. The index soared to a high of 18,406.25 from a low of 17,504.00.

According to Satish Kannav, technical analyst at Arihant Capital, 18,300 is a key resistance for the Sensex. And given past history, the 30-share index will not be able to sustain above this level, he said, hinting at yet another correction.In the market crash of May 2004 and May 2006, indices were unable to overcome 38 per cent retracement levels of the fall. This time around, 38 per cent of the recent crash on the Sensex stands at 18300, which it managed to surmount today.

"Despite the fall, the Sensex has been able to sustain above the 200-day moving average (16625-30 levels). Therefore, before the F&O expiry for the January series which is underway, one can expect a correction from current levels, with 16,625 being the support. Index heavyweight Reliance Industries specially looks weak, so one should watch out for the counter," said Kannav.

In wake of the nationwide bank strike, no funds transfer was possible today leading to a situation where brokers did not accept fresh orders from clients. This affected volumes. Today traded volume on NSE stood at Rs 13,402.87 crore against Rs 17,209.5 crore on Thursday.

This was after India’s wholesale price index inflation rate came on expected lines, rising 3.83 per cent in the week to Jan 12 from previous week's 3.79 per cent rise.

Sentiment also got a boost from an extended rally in Europe, where London's FTSE gained 1.16 per cent, Germany's DAX was up 1.99 per cent and France's CAC 40 rose 1.27 per cent.

Institutional players also were averaging out their positions, especially in the midcap space, in an attempt to make up for the losses suffered in the crash. This saw the BSE Mid-cap Index and CNX Mid-cap end 6.85 per cent and 8.27 per cent higher, respectively.

According to provisional data on both the exchanges, foreign funds Friday bought Rs 208.48 crore of shares against net sales of Rs 2,255 crore on Thursday.

Market breadth on BSE showed 1,558 advances and 1,162 declines, while on NSE, 930 shares gained and 294 fell.Great :) Market is coming up as told by experts. But how long? As it was a Friday, we can expect a Monday boom on 28.